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With $20B to Spend, Sanofi, Celgene Bet Big on Hemophilia, CAR-T

Two top drugmakers, Sanofi and Celgene, agreed on Monday morning to shell out more than $20 billion combined, cinching deals for hemophilia drug maker Bioverativ and cell therapy developer Juno Therapeutics. Each agreement represents an expensive, risky bet on a crowded, rapidly changing field.

In one acquisition, Sanofi is buying Waltham, MA-based Bioverativ (NASDAQ: BIVV), the one-time hemophilia business of Biogen (NASDAQ: BIIB), for $105 per share. The price represents a 64 percent premium on Bioverativ’s $62.75 per share closing price on Friday. Bioverativ generated about $847 million in sales in 2016, largely from two marketed blood-clotting drugs, Eloctate and Alprolix. Sanofi is gambling that these drugs will continue to generate sales even in the face of emerging, cutting-edge competition.

In the second deal, Celgene (NASDAQ: CELG) will pay $87 per share, or about $9 billion, to buy the roughly 90 percent of Seattle-based Juno (NASDAQ: JUNO) that it doesn’t already own. The agreement gives Celgene a technology platform to develop so-called CAR-T cancer immunotherapies, which have just made their way to market in the past year. The Wall Street Journal first reported rumors of a Celgene/Juno deal last week. Juno shares closed at $71.37 apiece on Friday.

“The biggest challenge for Sanofi management will be convincing investors that… the current hemophilia market will not be disrupted by new technologies (gene therapy) and product launches,” wrote Leerink analyst Seamus Fernandez, in a note Monday morning.

Still, Sanofi has clearly made hemophilia a priority—even without a gene therapy in its portfolio. Sanofi in January acquired full rights to fitusiran, an RNA interference treatment from Alnylam Pharmaceuticals (NASDAQ: ALNY) in late-stage testing, and is now adding Bioverativ’s hemophilia drugs to boot. Sanofi is also interested in rare blood diseases, and a move Bioverativ had made to help protect itself from the competition in hemophilia—buying True North Therapeutics for $400 million up front—helped increase its interest in the Waltham drugmaker. The True North deal gave Bioverativ TNT009, for the rare cold agglutinin disease. That drug is now in Phase 3 testing.

Celgene’s Juno buyout, meanwhile, marks the second acquisition in less than a year of a major developer of CAR-T therapies—and a risky investment in a fast-moving field whose commercial prospects remain unclear. The FDA approved the first two CAR-T therapies, from Novartis and Gilead Sciences (NASDAQ: GILD), in 2017.

A couple years ago, the field of CAR-T—living T cells, transformed into ruthless cancer killers by genetic engineering then reintroduced back into patients—seemed poised to become the domain of a new group of standalone biotech companies. But the bespoke, “autologous” version that requires using a patient’s own cells is proving complicated and expensive, especially in the manufacturing phase. The therapies reportedly have been struggling commercially at the outset.

When the Gilead deal was sealed, Kite was nearing FDA approval of axi-cel (Yescarta) to treat adults with non-Hodgkin lymphoma (NHL). Juno is farther away. Its most advanced experimental product, known as liso-cel or JCAR017, is also for adults with NHL. It is in the midst of a trial that Celgene said in a statement Monday morning should be enough to win FDA approval in 2019 if all goes well. Celgene expects JCAR017 to generate up to $3 billion in yearly sales.

If positive, the data would give momentum to Juno’s claims that the technology underpinning JCAR017 could serve other types of blood-borne cancers, as well, including acute lymphoblastic leukemia (ALL). Whether JCAR017 can leapfrog two competitors is Celgene’s biggest gamble.

Leerink analyst Geoffrey Porges noted that the acquisition will raise questions about how Celgene will handle the two rival multiple myeloma programs. But he nonetheless supports the deal, “even at this price,” since it “consolidates and streamlines Celgene’s investments in CAR-T, and deploys its capital in an area it already knows well, and has made significant capital, technical, scientific and human investments.”

Here’s more on hemophilia, CAR-T, and the issues developers of these therapies face as they progress forward.

Alex Lash contributed to this report.

Ben Fidler is Xconomy's Deputy Editor, Biotechnology. You can e-mail him at bfidler@xconomy.com Follow @benthefidler